By Ray-Ann Sedres
The Sanlam Gauge – which holistically measures economic transformation in South Africa – has called out small and medium businesses as critical to spur transformative growth in every industry. In this year’s Sanlam Gauge, an overall performance score of 65% for Enterprise and Supplier Development (ESD) was recorded for SA Inc as a collective. A relatively low percentage which could be attributed to a lapse in developmental and procurement spend during the pandemic.
Now Sanlam believes there must be renewed focus on procurement, enterprise and supplier development of small black- and women-owned businesses. If supported well, there is massive potential for inclusive economic growth, which will translate to increased job creation. SMMEs have the ability to make a significant contribution to economic development and social cohesion.
The SMME sector is central to the economy’s survival – and yet, we still fall short
The SMME sector has always been a special part of Sanlam’s mission to help foster a transformed Africa, where all Africans can live with financial confidence, security and prosperity. Ray-ann Sedres, Chief Transformation Officer at Sanlam says, “We know that SMMEs are particularly powerful and efficient levers of job creation. In fact, the National Development Plan forecasts that by 2030, SMMEs will generate 90% of the new jobs required.
“We have repeatedly acknowledged that the small business sector is the backbone of our economy, and yet we continue to fall short on providing the support SMMEs need to thrive. We need to make it much simpler for SMMEs to access markets, skills, and capital, and we are not referring to handouts but handups. In a country with historically high levels of unemployment, we must make entrepreneurship easier.
“Right now, just 12% of South Africans have the intention to start their own business ventures, according to the Global Entrepreneurship Monitor. We need to get this number up. A stronger commitment to ESD which includes procurement opportunities could play a pivotal role in providing real, sustained opportunities for smaller suppliers.”
Commitment that goes beyond ticking boxes
Sedres says that scorecards are useful, but a commitment to the SMME sector needs to go beyond a tick-box exercise. “It is in corporate SA’s best interests to bolster solid local supply chains through a sustained commitment to uplifting SMMEs. Sanlam is dedicated to doing just that. In 2021, R5-billion of our procurement deliveries were from black-owned enterprises, half of which were owned by black women. Our procurement spend from SMMEs in total was R3.2-billion.”
In terms of SMME upliftment, Sanlam has a myriad of initiatives underway:
- The Sanlam Group Enterprise and Supplier Development Programme has supported 2 964 total jobs since its start in 2013.
- The group’s ESD efforts have seen it provide R146-million in funding to help SMEs with post-pandemic recovery.
- Sanlam supports 26 black owned SMEs, 15 financial planning practices, and 144 black intermediaries. R5.2 million has also been invested in black broker development support.
- The group is on the brink of enhancing its Sanlam Investments’ Investors’ Legacy Range and Resilience Fund – both aimed at job creation and preservation primarily in the small business sector – with further SMME offerings.
- These funds will shortly be joined by other initiatives in the SMME space which have recently received board approval.
- Additionally, Sanlam has supported the Association for Savings and Investment South Africa (ASISA) with over R50-million to go towards funding local sector suppliers.
Sedres concludes, “Our country desperately needs new 11 million jobs in just eight years in order to live true to the 2030 National Development Plan commitment. Without SMMEs, we won’t get close to this target. And without corporate South Africa’s support, SMMEs cannot succeed. They’re our best lever to combat the country’s unemployment rate. They’re also the best way to solve the challenges we face as SA Inc. By uplifting SMMEs, we uplift the nation.”